The Four Hundred

IBM last week announced a 5 percent discount to customers who bought a single iSeries machine or upgraded through its online store. My first reaction to this was to think it odd that IBM would offer a discount after repricing the iSeries line, but that we shouldn't look a gift horse in the mouth. My second reaction was that IBM thinks customers are stupid with such a meager cut. I'm still working on the third reaction, which is probably closer to the truth.

Here's the deal. Customers buying a single machine can do so directly from IBM's Web site or through its direct telesales department (which is part of the same organization) and get a 5 percent discount if they order after April 15. The discount is in effect for customers in North America, Mexico, and Latin America, but not Europe. The discount will be given only to customers buying a machine for their own internal use, and resellers are explicitly prohibited from taking the discount. Customers can acquire the machine and then get third-party leasing (especially from IBM Global Financing). The stickler is that this deal cannot be combined with any other discount a customer might be eligible for. The deal covers new Model 170, 250, 270, 720, 730, 740, 800, 810, 820, 825, 830, 840, 870, and 890 machines. Also covered under the deal are model upgrades from 270 to 810, 720 to 810, 720 to 825, 730 to 810, 730 to 825, 730 to 870, 740 to 825, 740 to 870, 740 to 890, 820 to 810, 820 to 825, 820 to 870, 825 to 870, 830 to 825, 830 to 870, 830 to 890, 840 to 870, 840 to 890, and 870 to 890.

I have a hard time imagining anyone buying a big iSeries Model 870 or Model 890 box over the Web or over the phone and accepting a mere 5 percent discount. I also think that a 5 percent discount is probably not a typical discount out there in iSeries land. Even for deals that have very small official discounts, I am certain that IBM and resellers are throwing in all kinds of software and services to bring the total solution costs down and make a sale. Cutting prices as IBM did in January only sets the bar closer to the ground that it has to dance under, and customers will want the same 10 to 15 percent discounts they are used to getting, at the very least, even on one-off purchases. A configured iSeries machine is still more like a capital investment than a discretionary PC purchase.

I think IBM's marketeers are just testing the waters with this deal. IBM has offered these kinds of discounts before, through the same channel, and it might just be using it to gather sales leads or hear griping from customers who want a better deal. All I know for sure is that no one has to pay 95 percent of list price to get a new iSeries or an upgrade. There's plenty of room to haggle, and customers should do just that. And if this deal is an indication that IBM and its resellers are trying to hold the line at a 5 percent discount on the iSeries in this economy, I wish them luck. They're going to need it.

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